Finance Secretary Benjamin Diokno expressed optimism that the country’s improving investment climate will enable the government to reach its medium term goals.
“As we improve the investment attractiveness of our domestic economy, I am confident that we will be able to meet the growth targets indicated in our Medium-Term Fiscal Framework,” said Secretary Diokno in a pre-recorded keynote during the Inside ASEAN: The Philippines forum organized by credit rater Moody’s Investors Services.
The Inside ASEAN forum hosted discussions on the ongoing risks confronting the Philippines, such as inflation, rising energy prices, and spillovers from the Russia-Ukraine crisis, and the country’s economic recovery outlook. It was attended by investors, corporates, issuers, and multilateral banks.
Moody’s recently reaffirmed the country’s Baa2 rating with a stable outlook, citing the resilience of the country’s economic recovery to external pressures and the government’s commitment to policy continuity.
Moody’s said that the country is not significantly exposed to geopolitical risks and is less dependent on external demand as compared to Asia-Pacific peers given its relatively large domestic market, which in turn is further supported by stable remittance inflows from overseas Filipinos.
Moody’s cited the Marcos administration’s introduction of a MTFF as an assurance of gradual fiscal consolidation and debt stabilization.
The MTFF maps out the government’s strategy for maintaining fiscal health while remaining supportive of economic recovery. Its main goals are to reduce the fiscal deficit, promote fiscal sustainability, and enable robust economic growth.
The Framework focuses on improving tax administration, enhancing the fairness and efficiency of the country’s tax system, and promoting environmental sustainability to address climate change.
Secretary Diokno said that the Marcos administration will take advantage of existing structural reforms to attract beneficial foreign investments and create high-value jobs for the Filipino people. These include the Corporate Recovery and Tax Incentives for Enterprises Act and amendments to the Public Service Act, Retail Trade Liberalization Act, and Foreign Investments Act.
He said that the government will also pursue the remaining tax reform packages of the Duterte administration. Among these policy reforms are the Real Property Valuation and Assessment Reform Bill and the Passive Income and Financial Intermediaries Taxation Bill.
Moody’s said that the government’s commitment to policy reforms helps assure gradual fiscal repair, following a reversal of the strengthening of the government’s fiscal and debt metrics resulting from the pandemic.
“We are ready to build a stronger and greener economy fit for the twenty-first century. We have the right people at the helm and we have a clear, focused plan to make this lofty goal happen,” said Secretary Diokno.